Why is British taxpayers' money supporting Argentina's finances?

Sep 28 2011

Nile Gardiner at the Heritage Foundation has written for the Telegraph blog about the strong statement that the Government had to make at the United Nations in New York last week. In response to Argentina’s “increasingly belligerent stance”, as Nile puts it, the British delegation stated that we remain “fully committed to defending the rights of the people of the Falkland Islands to determine their own political, social and economic future.” That raises a critical question: why are we financially supporting a country that is threatening British territory and people?

Britain is a major shareholder in the World Bank’s International Bank for Reconstruction and Development, and rightly has considerable influence over the World Bank’s policies and priorities. Argentina owes the bank over $5 billion. New programmes are regularly being approved, like $30 million for a project aimed at improving public sector management, among other things, in the Province of La Rioja earlier this year.

It isn’t just the World Bank. An EU aid programme running from 2007 to 2013 is providing €65 million to Argentina. We pick up the tab through our contributions to the EU budget. We are responsible for over ten per cent of total gross contributions, which means we are paying nearly €8 million (nearly £7 million at the current exchange rate) to Argentina.

The Government should be fighting against this misuse of our money by Brussels. But there is a more immediate opportunity at the World Bank.

The Obama administration in the United States is resisting further programmes in Argentina. At a hearing of the House Committee on Financial Services, Representative Robert Dold asked why the World Bank was supporting a country which was refusing to pay many of its debts and ignoring international arbitration judgements, despite sitting on over $50 billion in reserves. The Assistant Secretary for International Markets and Development – Marisa Largo – said that a country which “falls squarely within the ranks of middle-income countries” and failed to engage properly with creditors shouldn’t be getting funding and the United States would continue to “vote no”.

Please write to your MP – this website makes it easy – and ask them to tell the UK Government to fight EU programmes sending our money to Argentina, and support the US move to ensure we aren’t backing loans to them from the World Bank.Nile Gardiner at the Heritage Foundation has written for the Telegraph blog about the strong statement that the Government had to make at the United Nations in New York last week. In response to Argentina’s “increasingly belligerent stance”, as Nile puts it, the British delegation stated that we remain “fully committed to defending the rights of the people of the Falkland Islands to determine their own political, social and economic future.” That raises a critical question: why are we financially supporting a country that is threatening British territory and people?

Britain is a major shareholder in the World Bank’s International Bank for Reconstruction and Development, and rightly has considerable influence over the World Bank’s policies and priorities. Argentina owes the bank over $5 billion. New programmes are regularly being approved, like $30 million for a project aimed at improving public sector management, among other things, in the Province of La Rioja earlier this year.

It isn’t just the World Bank. An EU aid programme running from 2007 to 2013 is providing €65 million to Argentina. We pick up the tab through our contributions to the EU budget. We are responsible for over ten per cent of total gross contributions, which means we are paying nearly €8 million (nearly £7 million at the current exchange rate) to Argentina.

The Government should be fighting against this misuse of our money by Brussels. But there is a more immediate opportunity at the World Bank.

The Obama administration in the United States is resisting further programmes in Argentina. At a hearing of the House Committee on Financial Services, Representative Robert Dold asked why the World Bank was supporting a country which was refusing to pay many of its debts and ignoring international arbitration judgements, despite sitting on over $50 billion in reserves. The Assistant Secretary for International Markets and Development – Marisa Largo – said that a country which “falls squarely within the ranks of middle-income countries” and failed to engage properly with creditors shouldn’t be getting funding and the United States would continue to “vote no”.

Please write to your MP – this website makes it easy – and ask them to tell the UK Government to fight EU programmes sending our money to Argentina, and support the US move to ensure we aren’t backing loans to them from the World Bank.